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Next Wave of Acquisitions

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Recently companies like AmericanGreetings, NBC and now Hearst come across my desk in corporate development roles, researching internet companies for acquisitions attempting to modernize or solidify their online offering. Again - it is a great time to be an entrepreneur - but I think that the dream of selling to the big .COMS will probably slow down a bit as we all restructure, mean while there are some extremely large companies that need to play catchup and are worth talking to!

CES

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Cars with Wings..

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What this drives into is the principal within all entities which asks if people can "really" change. The same question applies to businesses - can they change their fundamental DNA.

AOL is a great case to look at - a company founded on dial up, enhanced by an ancillary content business to retain dial up subscribers, now moving its focus into an ad supported content company.

When I began at AOL I kept searching for the soul - maybe the closest was Ted who seemed to exude the AOL DNA - but I often failed to find a consistent string within the business - some thread that tied the business together.

I wonder now how organizations can change - how much DNA can be manipulated? Is it simply a factor or switching staff, or is there some unsaid core to a company that is unchangeable. Love your comments : )

Out of office this week..

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Vanity Piece - Six Degrees of Nick Lachey

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Userplane's president and founder discusses the impact of celebrities and online social networks.

Editor's Note: YFly, a celebrity social network, relaunched on August 15, 2006. Nick Lachey, actor/singer/ex-husband of actress/singer/celebrity Jessica Simpson, is one of the networks co-founders. Mashable! Covered the relaunch in a post dated two days after the relaunch.

Working in the Los Angeles social networking space, I often meet entrepreneurs with the same story: "I am sure I can get this celebrity to create a profile, then boom-- my site will be huge!" Sounds like YFly has put this idea into practice.

After all, we've seen a dating site launch from Carmen Electra-- and even Dr. Phil inked a deal giving advice on Match.com. It could also be argued that MySpace saw hockey-stick growth once it began band support with what could be argued as "fan management tools" through music profiles on the site.

In essence, all these sites are looking for the tipping point - the connector (or connectors) that are so well described by author Malcom Gladwell in his book The Tipping Point. In essence - MySpace, Friendster, Dogster, any of these social networks rely on the 20 percent of individuals who drive the tastes and preferences of their respective larger social circles. This target is absolutely true, and absolutely does work online.

If someone were to breakdown the population of any of social network, they would find a select group of individuals who drive the most sign-ups, host the most friends, and most likely generate the most page views (as an experiment, choose one of your most connected MySpace friends and ask him or her how often each day someone hits them up to join a new social network.). Some social networks have started hiring these users - and some companies like mine (Userplane) are working to release tools to track and compensate and reward these super-users.

So what does this have to do with Nick Lachey? The theory is where ever celebrities go, the mass populous will soon follow. MySpace has successfully proven this with music (who does not want to read the blog of their favorite band?). At one point, I felt Friendster was going to do this with celebrities, but that does not seem to have gained traction.

Did Carmen Electra make her dating site a huge success? By all accounts it does not look like her persona has pushed the site into the top 10 percent of online dating properties, but I am sure it did drive traffic. Of course, few expect Carmen to be browsing the dating site inventory to find dates, so that could nibble away at its appeal.

Will Nick Lachey make this social networking site rank in the top 100 sites on Alexa? It would be a longshot, but not out of the question. If the site can encourage other celebrities to join and actively promote it, possibly. What is funny about celebrities in L.A. is that they do travel in packs-- and certain packs hold more star power than others. Since I have a two-year-old at home, I'm not trolling the clubs to see who is hitting the social scene-- but I haven't heard anyone from my staff saying they saw Nick's entourage at a nightclub!

Mike Jones is founder and president of Userplane. Read full bio.

Testing the Userplane Instant-Install Userlist

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The First Quarter - 4 Months In AOL.

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Today rounds out our first 4 months as a division of AOL. To say the least it has been a busy last 4 months - with lots of change all around for Userplane and AOL. As a tribute to some of the impressive and unexpected events that have occurred - here is the highlight list:

1. Userplane acquired by AOL
2. AOL doors open - warm welcome by Marcien Jenckes (the only man that can make an acquisition happen in 60 days within AOL)
3. Userplane traffic grows
4. Userplane released free-integrated offering - sees substantial pick up
5. Unexpected support and camaraderie from SVP Tina Sharkey
6. Direct exposure and strategy brainstorming with Jon Miller + handsome strategist Jorge
7. We hit 55m ads daily delivered
8. Corp dev research
9. "Becoming part of the legacy of AOL"
10. Userplane hires 5 more genius staffers (still a small team at only 14 : )
11. "What about widgets" - a Bankoff commissioned research project
12. Discussion, research and finally comprehension of AOL as a business (model built, finally visually understandable for me)
13. Seeing pieces of the soul of AOL - meeting with Ted Leonsis
14. Evaluation of AOL's future, establishment of directional decision for Userplane
15. Tina Sharkey resigns - Halloween
16. Strategic direction "commitment" by Jim Bankoff, Publisher Services
17. Exposure to Ad sales group, comprehension of strengths and short comings
18. Exposure to Jon Millers executive strategy meeting
19. Jon MIller fired.
20. Additional support of vision via Jim Bankoff and Marcien Jenckes
21. AMN starts rolling in our ad inventory!
22. Commitment of additional internal technology for vision realization
23. Build, build, build.
24. New Userplane'ers come aboard!
25. Userplane Webchat release- SNS support
26. Userplane gets up on AOL Beta! Yeah!
27. Jim Bankoff quits.
28. Time to meet Ron + Randy.. Next week maybe : )

Overall - we have met a lot of smart people within AOL- and I have personally discovered and and love the legacy of AOL - the company that brought the internet, email and IM to the masses.

The cuts although deep are by all means necessary - we are losing some fantastic minds and spirits around AOL - but it is a necessary step for us to transition from a access based business with content as an ancillary offering - to a content / ad driven free business. "Lean team, clear direction".

Userplane internally gains inspiration from the mission we set upon 5 years ago and are still on - supporting millions of publishers with applications that enhance online community! I believe that mission fits in with the long term success of AOL and continues the AOL legacy as the largest online community platform in the world.

The new Business Plan..

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My partners and I were fortunate enough to be asked to present at OSU and my alma mater University of Oregon this week. We spoke to a few entreprenurial undergrad and masters classes- all of which were focused around building business plans. Considering Userplane never really had a traditional business plan and none of us had masters degrees - it seemed ironic. Regardless it allowed us to take look back over the past few years.

Userplane grew organically with guiding principals, a financial forecast and a product plan - not really a traditional business plan. As I look at more and more internet businesses - it seems the traditional business plan format often does not support the dynamic and often unknown aspects of a .com business. Planning of course is critical to any venture, but a traditionally formatted business plan I think fails to capture the potential value, success and failure in a .com business.

I would propose the following structure for .com startups:

1. Business Overview (simple)
2. Wireframes + product walk through
3. Revenue model (and lets keep the CPM's realistic ok)
4. Technical development plan including timeline / scaling for the first rebuild
5. Key Staff and equity distribution
6. Competitors
7. "How you get your first X users"
8. Exit or Maintenance Strategy

And if you add in Web 2.0 theory:

9. Widget distribution strategy including:

API strategy
MySpace integration

10. 3rd Party mashups
11. Coopatition

Startup Review Profiles Userplane

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Nisan performed a full review of Userplane, its growth from inception through acquisition. You can read it here:

Userplane Case Study: Vertical market entry strategy pays off

Rumors

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So the rumor mill continues. The most often question asked is why AOL as a now "technology" company striving to be more product centered is bringing in a NBC exec to the CEO chair?

The best answer I have heard so is AOL is gaining speed as a advertising based business - and thus Time Warner is bringing in a seasoned advertising executive to cut the right deals and steer the ship. Right or wrong from a strategic approach - my guess is the logic holds true.

Unfortunately I think AOL needs to be more of a technology platform company than a media company to be successful in the long run - it will be interesting to see if the new CEO feels the same.

Regardless, losing Jon, Tina and Jason will be a culture shift - and one I was personally not hoping for!

Oh no, there goes Miller!

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So the first few months at AOL have been an exciting one - I always though that the drama at startups left as companies became more mature - I guess at the end the drama only really magnifies with size..

Jon Miller has been a great proponent of ours - identifying Userplane as an acquisition candidate, helping Marcien drive our deal - and supporting us as a remote entity working on progressive tactics to build AOL. I only hope his successor will be as forward thinking!

All this plus losing Tina - the world changes quickly!

Finally reading The Search

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I finally got around to reading The Search - a tale by John Battelle which reviews the history, growth of primarily search and Google. The debate on Google as a media or content company is compelling and seems to be echoed throughout the tech community. I am only about half through the book at the time of this post.

Ironically I originally though of Google as an ad network - they simply have strong technology that provides the most relevant and fraud-preventative ads to external site partners - which accounts for roughly 40% of their revenue.

The point the book reinforces for me is just how relevant search ads are. Thinking back to the days of Webcrawler (an AOL acquisition) - user driven search has always been the launch pad for the user.

Personally I am finding Googles search results less and less accurate - seeing how aggressive promoters have become in Google spamming the index is constantly being bombarded by malicious marketers. What is more impressive is even though I might be dissatisfied with Googles specific results - their distribution channels are so well established I find the as a lazy person i default to using them regardless..

Looking into the future, social search seems to be the answer - a index made for me from my peers, and the system would most likely anticipate my needs based on search history, time of day, schedule, etc - so that instead of me inputting my needs into a small box, it would simply predict and deliver me the specific results that were most probable for me at that time. That concept ties AI to search - and my guess is the next "big" thing in search is not search - but computer driven results delivery. Putting search beind the scenes and simply surfacing the results - which is all we are really searching for in the first place.

Web 2.0 - quick summary

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As well pointed out by many of the attendees at Web 2.0 2006, it was a bit less inspiring than Web 2.0 2005. Interviews not quite as hard pressing, less shocking announcements, all this despite the fact that the speakers were at the top of many of the largest media companies pushing the internet forward. With a $3500 entry fee - it filtered out some of the very early and most interesting innovators.

On the flip side, Monday I attended Widgets Live - which showcased some very innovative companies and technologies - YourMinis.com being one of my favorites. Om and Niall did a fantastic job - I look forward to the next one.

WidgetsLive

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Om + Niall's Widgets conference was good today - potentially even more forward thinking than tomorrows Web 2.0 conference. A long time ago my partner Javier talked about Userplane as a company without a consumer website, that talked to millions of users daily through distributed "apps". We built that company over the past 3 years - and ironically now that company's distribution strategy has a name - widgets.

Overall the widget market has two faces:

1. Places to Put Widgets (personal homepages, start pages, profiles, etc)
2. Actual Widgets

This all ties back to the further customization of the personal web, my personal information aggregator - and the incredible trend of the personal profile. Originally I felt this trend was completely the responsibility of MySpace trends - but now I feel the genesis is greater. Personal homepages have been around for quite some time - now maybe since the web world is open that was the shift that allowed these secondary markets to be created.

It could be argued that there really are two types of widgets:

1. Widgets for me
2. Widgets that represent me to others

Although I am sure there is overlap - my guess is each widget will really live in one of those two primary categories.

Testing out the YourMinis beta release

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Sonific Google Gadget

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AOL to offer Web API for its IM

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AOL to offer Web API for its IM

AOL, a division of Time Warner, will make its AIM instant messaging network web-friendly, making web-based application programming interfaces (API) and widgets available to anyone who wants to incorporate AIM functionality right into their Web sites and online communities, company executives say. OpenAIM was announced earlier this year, but was restricted to desktop applications.

"There are various folks who have ideas and needs to adopt it for their own specific use," said Stephen Benedict, Principal Product Manager for the AIM Service at AOL, said in an interview today. AOL wants to encourage people to build businesses around OpenAIM, and is now extending the functionality to the web. "We will provide tools around this and extend the concept of presence and identity," Benedict added.

This web API move can be viewed as a rearguard action for AOL – increasingly developers are beginning to center their IM/real time communication strategies on Jabber/XMPP platforms. The SIPphone-LiveJournal collaboration, which was reported on GigaOM earlier this summer is a perfect example of the new found affection for these open platforms. (XMPP approach entails primarily building out your own server locally and federating whereas AIM is about easily integrating with hugely popular IM service out there.) By offering OpenAIM and its web APIs, AOL is trying to stay relevant in the IM ecosystems. The recent Userplane acquisition is also part of company's platform extension strategy.

OpenAIM, so far has been restricted to desktop applications – PlayLinc and Doppelganger being two examples of such applications that use AIM's authentication, IM and presence information. The web version of OpenAIM is an effort by the company to rally web developers to its platform. The company is betting that its web APIs will result in many mash-ups and extend the utility of the AIM network, estimated to have 63 million users.

For developers the lure of the AIM user base can be pretty alluring. Kust like Google Maps API allows you to easily plug in a map without worrying about the cartography details, OpenAIM gives you messaging capabilities integrated with a developer ID. The installed base can easily log into new applications, try them out and become converts if the service meets their approval – no complicated sign-on process. Theoretically, the OpenAIM web APIs could be used to develop a social network build around the AIM authentication system that uses the IM network for communication. AOL is hoping that many other use case scenarios will emerge. "We cannot be all things to all people," says Benedict.

AOL, till recently an access provider decided to morph into a web-services companies earlier this year, betting that it could race against time, and retain its dwindling dial-up user base by offering them free web-based offerings. The company's biggest advantage is that it understands the average users. But it also needs to adapt and compete with the more nimble competitors such as Google.

The service is essentially free if the number of daily logons to the AIM doesn't exceed 250,000 a day and tops out at 2 million logons a month. After that company says it will enter into a commercial agreement with the developers, but the terms are going to be pretty reasonable. We aren't clear on how this will apply to existing businesses built around AIM, such as the web-based multiple-service instant messaging interface from Meebo.

Amongst the widgets to be offered, there will be an IM widget, the Buddy List widget, and a Get Info Widget, which provides buddy info by way of a separate window. These will be offered as APIs along with a Presence API, which would allow AIM users to get and set their availability, away messages and profiles.

The web-version of OpenAIM is likely to be announced later today tomorrow at the WebGuild conference in Santa Clara, California. As part of announcements, the company is going to offer an AIM widget that can be put on your blog, or on your personal space.

Nice Alexa Mashup

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From our friends at POF:

http://www.alexaradar.com/fast/country/ca

Identity

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Sent to me by Javier - in case it interests you!

http://journal.planetwork.net/article.php?lab=reed0704=1

Payments

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